Goldman Sachs Chief Investment Officer: Once the cryptocurrency bubble collapses, it will affect 1% of global GDP

Sharmin Mossavar-Rahmani, chief investment officer of Goldman Sachs' investment strategy department, said in an interview that cryptocurrency is a bubble, and when this bubble collapses, it will have an impact on 1% of global GDP.

Mossavar-Rahmani, who advises clients with more than $10 million in assets, said cryptocurrencies have become a hot topic among her clients and colleagues. She said Goldman Sachs recognizes the opportunities that blockchain technology brings to most financial technology companies, but cryptocurrencies in their current state are still a bubble.

Mossavar-Rahmani compared the price trends of Bitcoin and Ethereum to stock market bubbles such as the TOPIX in 1990 and the Nasdaq in 2000, referring to data from a report by Goldman Sachs' Investment Strategy Department.

She said that compared with cryptocurrencies, the Topix and Nasdaq are very flat, and even the tulip bubble in the 17th century cannot compare with cryptocurrencies. The price of Bitcoin is too high. Mossavar-Rahmani added that Ethereum's price volatility is greater and its curve trend even exceeds Bitcoin.

As for the impact of the collapse of the cryptocurrency bubble, Mossavar-Rahmani believes that it will not lead to a global financial crisis because cryptocurrencies are only a small part of the global economy compared to other bubbles.

Whether compared to U.S. GDP or global GDP, cryptocurrencies are a small part of the global economy, accounting for less than 1% of global GDP.

She acknowledged that building cryptocurrency exchanges, infrastructure and hedge funds requires huge investments, and that some people will be "hurt" when the bubble bursts...but this is only a small part of global GDP.

At the end of January, Goldman Sachs CEO Lloyd Blankfein denied that they were about to launch a cryptocurrency trading platform, but the New York investment bank has held a stake in cryptocurrency trading platform Circle since 2015.